Cape Clear could become web services leader: Gartner

17 May 2004

Dublin firm Cape Clear’s Integration Server technology has the chance to lead the enterprise market for web services that integrate applications in business, according to a new study by IT analyst Gartner.

Founded in 1999 by a team of former Iona Technologies executives, Cape Clear’s strategy from the beginning has been driven by a vision of web services as a disruptive technology for application integration. More than half of Cape Clear’s 70 employees work in research and developments, with the company’s business split evenly between the US and the UK.

According to a research note by Gartner, Cape Clear’s Integration Server technology is a capable enterprise service bus for integrating applications. In addition, Gartner said that Cape Clear has more users than most of its competitors. However, a limited set of adopters of the technology as well as a small sales team and weak geographical coverage will limit Cape Clear’s ability to sell its software in large volumes and break into the mainstream.

Nonetheless, aggressive pricing and a knack of scoring major deals have put Cape Clear firmly on the enterprise software integration map. The company’s product set has been available for more than three years and has between 40 and 50 customers signed up to integrate complex technology tasks. Current customers include AT&T, BNP Paribas, BT, Ericsson, JP Morgan Investor Services and Vodafone.

Cape Clear’s commercial ploy has also matured to include four companies selling its software on an OEM basis and several niche systems integration firms.

According to Gartner, most of Cape Clear’s revenue comes from direct sales, but Cape Clear wants to build an indirect channel in Europe. It is targeting Scandinavia, Germany and Italy and will mainly build partners with small, specialised system integrators.

The company’s Integration Server product sells at €10,000 per seat and has mainly been used by corporate customers to provide web services access to established J2EE and CORBA applications in “light” business-to-business projects. Gartner describes these as typical uses of web services in Cape Clear’s target industry sectors.

A possible Achilles Heel spotted by Gartner is the fact that Cape Clear’s Integration Server technology doesn’t have an embedded Java Messaging Service transport yet, although it can connect with products from BEA Systems, IBM, Sonic Software and Tibco Software, as it has strong XML and web services routing capabilities.

Gartner also highlighted Cape Clear’s latest technology known as Data Interchange, which runs on top of Integration Server and is being used by networks of banks through the SWIFT network to relay spreadsheet information, and enables companies to transform complex messages to and from XML.

In summing up Cape Clear’s strengths, Gartner said that the company’s strategy to become a leading application integration vendor by providing low-cost web services technology will be aided by an experience and well-connected management team and a proven technology product.

However it warned that Cape Clear’s Data Interchange is still unproven with a limited number of adapters. It also faces the threat of large vendors such as IBM and BEA entering a market that is already overcrowded and over-competitive.

Addressing the bottom line, Gartner said: “Cape Clear has an ambitious, but realistic, vision and is led by an experienced management team. As a result, it could become a leading player in the emerging enterprise service bus market. The company’s main problem will be to sustain differentiation of its products in the face of challenges from large, established middleware vendors like IBM and Microsoft. Narrow geographical coverage and lack of strong partners limits its ability to sell in large volumes. This, coupled with a limited set of adopters, will hinder Cape Clear’s ability to rapidly penetrate the mainstream market, despite its aggressive pricing.”

By John Kennedy